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Monetary Policy Review: RBI maintains key lending rate at 6.25%

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Mumbai, April 6: The Reserve Bank of India (RBI) in its first bi-monthly monetary policy review of 2017-18 on Thursday kept its key lending rate (repo rate) unchanged at 6.25 per cent, while hiked reverse repo rate to 6 percent.

The announcements were made by Monetary Policy Committee, headed by RBI Governor Urjit Patel.

GVA growth is projected to be 7.4% in 2017-18 as compared to 6.7% in 2016-17. MSF (Marginal Standing Facility) and the bank rate is 6.50 percent.

RBI Governor Urjit Patel said, “RBI focused on removing liquidity overhang in system. There was surge in liquidity in system after demonetisation that RBI had to absorb.”

The inflation is projected to be 4.5% for the first half of 2017-18 and 5% for second half of the year

General Govt deficit which is high by international comparison, poses yet another risk for path of inflation… 1/2: RBI in policy statement.which is likely to be exacerbated by farm loan waivers 2/2: RBI in bi-monthly monetary policy statement

“Consequent upon the narrowing of the LAF (liquidity adjustment facility) corridor, the reverse repo rate under the LAF is at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate are at 6.50 per cent,” an RBI policy statement said.

“The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth,” it added.

THe RBI said risks are evenly balanced around the inflation trajectory at the current juncture. “There are upside risks to the baseline projection,” it said.

“Inflation developments have to be closely and continuously monitored, with food price pressures kept in check so that inflation expectations can be re-anchored.

“At the same time, the output gap is gradually closing. Consequently, aggregate demand pressures could build up, with implications for the inflation trajectory,” it added.

At its last policy review in February, while holding rates at 6.25 per cent, the central bank had changed its policy stance from “accommodative” to “neutral”.

Expectations that the RBI will maintain status quo on rates had been fuelled by inflation numbers, with wholesale inflation soaring to over a three-year high of 6.55 per cent in February and retail inflation climbing to 3.65 per cent due to rise in food and fuel prices.

Wefornews Bureau

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Global cues subdue equity indices; metal stocks fall

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SENSEX-

Mumbai, June 18: Weak international markets and concerns of a resurgent global trade war depressed the key Indian equity indices on Monday.

According to market analysts, heavy selling was witnessed in the metal, consumer durables and IT stocks.

At 3.30 p.m., the wider Nifty50 of the National Stock Exchange (NSE) provisionally closed at 10,799.85 points, down 17.85 points or 0.17 per cent from the previous close of 10,817.70 points.

Similarly, the barometer 30-scrip Sensitive Index (Sensex) of the BSE, which had opened at 35,698.43 points, closed at 35,548.26 points (3.30 p.m.) — down 73.88 points or 0.21 per cent from its previous session’s close of 35,622.14 points.

The Sensex touched a high of 35,721.55 points and a low of 35,518.73 points. The BSE market breadth was bearish with 1,709 declines and 934 advances.

The top gainers on the Sensex were ICICI Bank, Tata Motors, Tata Motors (DVR), Bajaj Auto and Maruti Suzuki whereas Vedanta, Kotak Bank, Bharti Airtel, Coal India and Axis Bank were the major losers.

On the NSE, Hindustan Petroleum, Indian Oil Corp and ICICI Bank were the highest gainers while, Hindalco Industries, Tata Steel and Vedanta lost the most.

IANS

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Audi CEO ‘Rupert Stadler’ arrested in diesel emissions probe

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Audi CEO
Audi CEO Rupert Stadler (File Photo)

Madrid, June 18: Rupert Stadler, the Chief Executive of German carmaker Audi, was arrested on Monday in connection with an investigation into the diesel emissions scandal.

German prosecutors named Stadler and one other Audi executive as suspects for fraud and false advertisement in the car maker’s continuing emissions scandal, Efe news reported.

Nicolai Laude, a spokesperson for Audi’s parent company Volkswagen, confirmed that Stadler had been arrested but he declined to comment on the investigation. He said the company’s supervisory board would soon discuss the matter.

“The principle of the presumption of innocence continues to apply to Stadler,” he added.

Munich prosecutors said they had acted because of risk that Stadler might seek to suppress evidence, CNN said. They added that Stadler would be questioned by Wednesday, once he had spoken to his lawyers.

Shares in Volkswagen dropped by 2 per cent in Frankfurt. Prosecutors said last week they had searched Stadler’s home for evidence as part of an investigation that has been underway for over a year.

The arrest came just days after Germany imposed a $1.2 billion penalty on Volkswagen for rigging diesel engine emissions worldwide.

Volkswagen first admitted in 2015 it had rigged millions of diesel engines to cheat on emissions tests. Diesel cars from Volkswagen and its Audi subsidiary cheated on clean air rules with software that made emissions look less toxic than they actually were.

Martin Winterkorn, the former chief executive officer of Volkswagen, was indicted in May by US prosecutors. He was charged with wire fraud and conspiracy to defraud American customers and violate the Clean Air Act.

IANS

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Market Review: Higher industrial output, Kim-Trump meet lift equity indices

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Sensex Nifty Equity

Mumbai, June 16: Healthy industrial production data and an encouraging geo-political scenario aided the key Indian equity indices to rise for the fourth consecutive week.

The gains in the week ended Friday, however, were limited by a number of global factors including the interest rate hike in the US, and US President Donald Trump’s approval to tariffs on $50 billion of Chinese exports.

Additionally, domestic factors such as a rise in retail and wholesale inflation also arrested the gains.

Index-wise, the barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 178.47 points or 0.50 per cent to close at 35,622.14 points on a weekly basis.

The wider Nifty50 of the NSE closed the week’s trade at 10,817.70 points — up 50.05 points or 0.46 per cent — from its previous close.

According to analysts, market breadth was positive in only two of the five trading sessions.

“Markets ended the week with modest gains after a sharp bounce back from the lows of 10,755 points (Nifty50),” said Deepak Jasani, Head of Retail Research at HDFC Securities.

Hem Securities’ Director Prateek Jain said: “Last week indices extended their winning streak to the fourth consecutive week. The upswing was seen despite retail inflation rising to 4.9 per cent for the month of May compared to the previous month.”

According to Rahul Sharma, Senior Research Analyst at Equity99, “It was an eventful week on the global front too, with US President Donald Trump and North Korean leader Kim Jong Un signing a joint agreement for the denuclearisation of the Korean Peninsula.”

“Further, the Fed (US Federal Reserve) has again done what it was expected to do as it raised benchmark interest rates hinting at a little more aggression in tightening monetary policy this year,” Sharma said.

“Another event, which kept investors sentiments on the toe was reports that President Donald Trump’s administration has cleared tariffs on tens of billions of dollars’ worth of Chinese goods”

On the currency front, the rupee closed at 68.02 against the US dollar depreciating by 51 paise from its previous week’s close of 67.51 per greenback.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrip worth Rs 5,294 crore, while the domestic institutional investors purchased stocks worth Rs 4,014.25 crore during the week.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 3,071.85 crore, or $455.4 million, in the week ended on June 15.

Sectorally, the top gainers were the pharma, IT, energy and PSU bank indices and the top losers were metal, infrastructure and realty indices, Jasani told IANS.

The top weekly Sensex gainers were Dr Reddy’s Lab (up 13.97 per cent at Rs 2,351.10); Sun Pharma (up 8.11 per cent at Rs 571.05); Tata Consultancy Services (up 5.33 per cent at Rs 1,841.45); IndusInd Bank (up 4.01 per cent at Rs 1,965.85); and Reliance Industries (up 3.10 per cent at Rs 1,013.85 per share).

The major losers were Tata Steel (down 5.60 per cent at Rs 565.95); ONGC (down 4.64 per cent at Rs 165.45); Coal India (down 3.74 per cent at Rs 279.05); NTPC (down 3.40 per cent at Rs 156.05); and Tata Motors (DVR) (down 3.30 per cent at Rs 180.05 per share).

IANS

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